^{Photo: South China Morning Post}

Pop Mart’s Earnings Blow Past Expectations

Chinese toymaker Pop Mart International Group delivered a staggering financial performance for the first half of 2025, reporting a 396.5% jump in net profit to 4.57 billion yuan ($634 million). Revenue for the same period surged 204.4% year-on-year to 13.88 billion yuan ($1.93 billion), far surpassing earlier forecasts of at least 200% revenue growth and 350% profit expansion.

Following the results, Pop Mart shares surged more than 8% on Wednesday morning in volatile Hong Kong trading, briefly dipping as much as 4.7% at the opening before rebounding strongly by mid-session. The stock has already gained more than 200% since the start of 2025, making it one of the best-performing consumer stocks in Asia this year.

The Labubu Phenomenon Driving Sales

At the center of Pop Mart’s meteoric rise is its flagship character Labubu, a sharp-toothed, big-eared “ugly-cute” plush toy that has captured the attention of global fans. Once a niche product, Labubu collectibles have gone mainstream, spotted on the bags of celebrities such as Rihanna and Blackpink’s Lisa.

Pop Mart’s signature “blind box” model—where customers only discover which figurine they purchased after opening the package—has amplified the hype, driving repeat purchases and creating a resale market where rare editions trade for multiples of their original price.

Labubu’s popularity has turned the brand into a cultural symbol across Asia and beyond, and analysts credit the character with anchoring much of Pop Mart’s revenue explosion.

Overseas Expansion Boosts Growth

While China remains the company’s largest market, international growth has been remarkable. Revenue from Asia-Pacific markets outside China soared 257.8% to 2.85 billion yuan ($395 million). The Americas saw the fastest growth, with sales skyrocketing more than 1,000% year-on-year to 2.26 billion yuan ($313 million), fueled by strong demand in the United States.

Europe also showed solid momentum, with Pop Mart aggressively opening new retail stores and online channels to capture growing interest in collectible toys. The company’s expanding global footprint highlights its ambition to transform from a Chinese trendsetter into a world-leading toy and entertainment brand.

Regulatory Headwinds Loom

Despite the impressive results, Pop Mart faces challenges. In June 2025, Chinese state media called for tighter regulations on blind-box toys and trading cards, particularly for children under the age of eight. Suggestions included age verification systems at checkout and parental consent for online purchases.

Although regulators did not directly name Pop Mart, the commentary was widely interpreted as a warning to major players in the blind-box industry. Critics argue that the mystery-box model encourages excessive spending, especially among children, by leveraging the psychology of chance and reward.

Market Skepticism Despite Rally

While investors are enthusiastic, some analysts remain cautious. Jeff Zhang, equity analyst at Morningstar, warned that the longevity of Pop Mart’s intellectual property remains uncertain.

“Sales of Labubu and other characters are strong today, but consumer preferences can shift quickly in the toy industry. If Pop Mart fails to sustain innovation or develop new hit characters, its growth trajectory may weaken in the next 5–10 years,” Zhang noted.

Morningstar also cautioned that the stock may be overvalued, given the high risks of relying heavily on a small number of intellectual properties.

Intellectual Property at the Core of Strategy

In its earnings report, Pop Mart reaffirmed that intellectual property (IP) remains central to its strategy. The company emphasized its plan to invest in creating and acquiring new characters while also building theme parks, digital platforms, and global retail outlets.

The company has already experimented with augmented reality and NFT-linked collectibles, suggesting that it sees opportunities in blending traditional toy sales with new digital experiences.

Outlook

With nearly 400% profit growth, booming overseas expansion, and soaring stock performance, Pop Mart stands at the forefront of China’s consumer growth story in 2025. However, regulatory scrutiny and the challenge of maintaining cultural relevance could determine whether its current success becomes a long-term legacy or a short-lived craze.

For now, investors and fans alike are betting heavily on Labubu’s staying power—and on Pop Mart’s ability to turn a viral trend into a sustainable global brand.

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